§ 321. Reserved Powers of Congress-Amendment of Charter of Subsidized Railroad-Railroad and Telegraph Company Cemetery Company.-The objects which Congress sought to accomplish by the act of July 1, 1862,1 granting a subsidy to aid in the construction of both a railroad and a telegraph line from the Missouri River to the Pacific Ocean, and by the act of July 2, 1864,2 amendatory thereof, were the construction, the maintenance and the operation of both a railroad and a telegraph line between those two points; the governmental aid was extended for the purpose of accomplishing all these important results, nor is there anything in subsequent legislation to indicate a change of this purpose. The provisions in those acts permitting the railroad company to arrange with certain telegraph companies for placing their lines upon and along the route of the railroad and its branches, did not affect the authority of Congress, under its reserved power, to require the maintenance and operation by the railroad company itself, through its own officers and employees, of a telegraph line over and along its main line and branches. An arrangement between the railroad company and the telegraph company, such as was permitted under the acts of 1862 and 1864,3 could have no other effect than to relieve the railroad company from any present duty itself to construct a telegraph line to be used under the franchises granted and for the purposes indicated by Congress. No arrangement of the character indicated by Congress could have been made except in view of the possibility of the exercise by Congress of the power reserved to add to, alter or amend the act that permitted such arrangement. It was not competent for Congress under its reserved power to add to, alter or amend these acts, to impose upon the railroad companies duties wholly foreign to the objects for which it was created or for which governmental aid was given, nor, by alteration or amendment of those acts, destroy rights actually vested, nor disturb transactions fully

1 Chap. 120, 12 Stat. 489.

'Chap. 216, 13 Stat. 356.

3 Sec. 19, act July 118, 62, and § 4,

act July 2, 1864, chap. 220, known as the Idaho Act.

consummated. The provisions of the act of 1888,4 requiring all railroad and telegraph companies to which the United States have granted subsidies, to "forthwith and henceforward, by and through their own respective corporate officers and employees, maintain and operate, for railroad, governmental, commercial, and all other purposes, telegraph lines, and exercise by themselves alone all the telegraph franchises conferred upon them and obligations assumed by them under the acts making the grants," is a valid exercise of the power reserved by Congress. In the Sinking-Fund Cases the legislation of Congress in relation to the Central Pacific Railroad Company and the Western Pacific Railroad Companythe latter being by consolidation a part of the former-was considered, and it was held, 1. That, to the extent of the powers, rights, privileges and immunities thereby granted, Congress retained the right of amendment, and by exercising it could, in a manner not inconsistent with the original charter granted by California, as modified by the act of that State passed in 1864, accepting what had been done by Congress, regulate the administration of the affairs of the company in reference to the debts created by it under authority of such legislation. 2. That the establishment of the sinking-fund by the act of May 7, 1878, did not conflict with anything in said charter. It was also decided that the establishment of the fund was a reasonable regulation of the administration of the affairs of the companies, promotive alike of the interests of the public and of the corporators, and was warranted under the authority which Congress had, by way of amendment, to change or modify the rights, privileges and immunities granted by it. The right of amendment, alteration or repeal reserved by Congress in said acts of 1862 and 1864 was also considered. In another case it appeared that a cemetery

Act Aug. 7, 1888, chap. 772, 25 190. See United States v. Western Stat. 382. Union Teleg. Co., 50 Fed. 28.

5

$ United States v. Union Pacific Ry. Co. & Western Un. Teleg. Co., 160 U. S. 1, 40 L. ed. 319, 16 Sup. Ct.

Sinking Fund Cases (Union Pac. R. Co. v. United States), 99 U. S. 700, 25 L. ed. 496.

company was incorporated in 1854 by an act of Congress which authorized it to purchase and hold ninety acres of land in the District of Columbia, and to receive gifts and bequests for the purpose of ornamenting and improving the cemetery; enacted that its affairs should be conducted by a president and three other managers, to be elected annually by the votes of the proprietors, and to have power to lay out and ornament the grounds, to sell or dispose of burial lots, and to make by-laws for the conduct of its affairs and the government of lot-holders and visitors; fixed the amount of capital stock to be divided among the proprietors according to their respective interests; and provided that the land dedicated to the purposes of a cemetery should not be subject to taxation of any kind, and no highways should be opened through it, and that it should be lawful for Congress thereafter to alter, amend, modify or repeal the act. Presently afterward thirty of the ninety acres were laid out as a cemetery, the cemetery was dedicated by public religious services, and a pamphlet was published, containing a copy of the charter, a list of the officers, an account of the proceedings at the dedication, describing the cemetery as "altogether comprising ninety acres, thirty of which are now fully prepared for interments," and the by-laws of the corporation, which declared that all lots should be held in pursuance of the charter. No stock was ever issued, but the owner of the whole tract, named in the charter as one of the original associates, and in the list published in the pamphlet as the president and manager of the corporation, knowing all the above facts, and never objecting to the appropriation of the property as appearing thereby, for more than twenty years managed the cemetery, sold about two thousand burial lots, and gave to each purchaser a copy of the pamphlet, and a deed of the lot, signed by himself as president, bearing the seal of the corporation, and having the by-laws printed thereon. In 1877 Congress passed an act, amending the charter of the corporation providing that its property and affairs should be managed, so as to secure the equitable rights of all persons having any vested interest in the cemetery by a board of five

trustees to be elected annually, three by the proprietors of lots owned in good faith upon which a burial had been made, and two by the original proprietors; and that of the gross receipts arising from the future sale of lots one-fourth should be annually paid by the trustees to the original proprietors and the rest be devoted to the improvement and maintenance of the cemetery. It was held that the act of 1877 was a constitutional exercise of the power of amendment reserved in the act of 1854; that the owner of the land was estopped to deny the existence of the corporation, the setting apart of the whole ninety acres as a cemetery, the right of the lot-holders to elect a majority of the trustees; and that he was in equity bound to convey the whole tract to the corporation in fee, and to account to the corporation for three-fourths of the sums received by him from sales of lots since the act of 1877; and the corporation to pay him one-fourth of the gross receipts from future sales of lots.?

§ 322. Obligation of Contract-Vested Rights-Conditions as Affecting-Reserved Power of Congress-Railroad Grants.-Where a statute authorizes railway companies to build across and upon city streets but makes the city's assent a prerequisite, if such consent in due form is secured the company's right, in so far as the designated streets are concerned, to build its tracks, is complete. If the company accepts the privilege the right becomes vested, fixed and certain, the city's consent cannot be recalled, and the right so vested can only be revoked in an action, brought under the State's authority, to forfeit it. And when an act granting public lands to aid

'Close v. Glenwood Cemetery, 107 U. S. 466; 27 L. ed. 789, 3 Sup. Ct. 10, cited in Citizens' Savings Bank v. Owensboro, 173 U. S. 636, 647, 43 L. ed. 840, 19 Sup. Ct. 530; Covington v. Kentucky, 173 U. S. 231, 239, 19 Sup. Ct. 383, 43 L. ed. 679; United States v. Union Pacific Ry. Co., 160 U. S. 1, 37, 40 L. ed. 319, 16 Sup. Ct. 190; New York & N. E. R. Co. v.

Bristol, 151 U. S. 556, 567, 38 L. ed. 269, 14 Sup. Ct. 437; Louisville Water Co. v. Clark, 143 U. S. 1, 14, 12 Sup. Ct. 346, 36 L. ed. 55; Gibbs v. Consol. Gas Co. of Baltimore, 130 U. S. 396, 408, 32 L. ed. 979, 9 Sup. Ct. 553.

Denniston & Sherman Ry. Co. v. St. Louis Southwestern Ry. Co., 30 Tex. Civ. App. 474, 476, 72 S. W. 201.

in the construction of a railroad provides that patents shall issue from time to time, as sections of the road are completed, but reserves to Congress the right at any time "to add to, alter, amend, or repeal this act," Congress may, without violating the Constitution of the United States, by subsequent act passed before any of the road is constructed, or any of the land earned, require the cost of surveying, selecting and conveying the land to be paid into the treasury of the United States before the conveyance of the granted lands to any party entitled thereto."

§ 323. Implied Reservation in Favor of Sovereign Power. -When a grant has once been made by legislative authority, to the extent of the rights conferred the power which made it is expended, and it cannot be taken back or transferred to another, until the public interests and welfare shall demand its resumption, and provision shall have been made for just compensation to the owner in the manner required by law. This rests upon an implied reservation to that effect or extent in favor of the sovereign power.10 So the right to lay tracks in city streets is held to be taken subject to the implied power of the State to modify ordinances of the city so that the latter may be empowered to forbid construction of tracks, etc., without compensation to owners of abutting property, and such enactment will not be unconstitutional. There may also be an implied reservation of power, in a charter to a railroad company, to incorporate companies to transport other than passengers.12

11

§ 324. Obligation of Contract-General and Special Laws -Reservation of Power to Alter or Repeal-Quo Warranto. -Where a state constitution provides that corporations may

Northern Pac. R. R. Co. v. Traill R. Co., 57 Iowa, 393, 10 N. W. County, 115 U. S. 600, 29 L. ed. 477,

6 Sup. Ct. 201.

754.

12 Richmond, F. & P. R. Co. v.

10 Mills v. County of St. Clair, 7 Louisa. R. Co., 13 How. (54 U. S.) 71, 14 L. ed. 55, considered more Des Moines & Ft. D. fully under § 333, herein.

Ill. 197, 227. 11 Drady v.